Taxing Fund Managers

The Wall Street Journal has an update on the effort to raise taxes on managers of investment partnerships. The latest twist isn't just raising the rates on "carried interest," but imposing new taxes on firms that go public: "The Senate plan—slightly milder than a House bill passed last week—also includes what is known as an 'enterprise-value tax' provision. It would tax the sale of a private-equity firm, hedge fund and real-estate partnership at higher rates....The section of the bill that most rankles financiers is the enterprise-value tax. Lawyers and lobbyists for investment-management partnerships describe the provision as punitive and having no precedent. The sale of a grocery store, manufacturer or bank would still be taxed at lower capital-gains rates."